Why now, Jerry?
The big news in the tech world today is that Yahoo! CEO Jerry Yang finally did what many had been begging him to for months and stepped down.
What I don’t understand is why now when things finally seemed to calm down? After months of fighting with Microsoft and then Carl Icahn, now is when he finally decides to throw in the towel? Did he get a better offer from the Obama administration?
Let’s troll through the news and blogs and see what we can find out, shall we?
First, it’s universally acknowledged that Yang never was a good fit at CEO, a job he took after former Warner Bros.’ boss, Terry Semel, crashed and burned in the position 18 months ago. Yang went on to crash and burn himself, failing to achieve a merger with anyone, especially Microsoft, while the company’s stock price plunged. He then failed to complete a joint advertising deal with Google after authorities deemed it a potential antitrust violation. In fact, most tech publications and blogs seem positively giddy to learn that Yang is finally giving up the CEO ghost.
Potential incoming CEOs include: News Corp. COO Peter Chernin (really?), as well as former AOL head Jon Miller, former eBay CEO Meg Whitman, Google ad exec Tim Armstrong, former Fox Interactive exec Ross Levinsohn and former Yahoo COO Dan Rosensweig (who is currently with the Quadrangle Group), all of which are according to Boomtown over at AllThingsD. Kara Swisher/Boomtown also mentions former Microsoft top exec Kevin Johnson, now CEO of Juniper Networks (JNPR), and who led the software giant’s abandoned takeover bid against Yahoo earlier this year. Here are a few more names that Kara put out there Wednesday morning.
So, that’s the why, but not the now.
Yang and Yahoo! Chairman Roy Bostock just say that this is something that was in the works for a while and leave it that. Perhaps it’s that company shareholders just couldn’t stand the company’s bottoming-out stock price for one more minute?
I agree that perhaps Mr. Yang was not the best CEO ever to helm a company, but I would also argue that timing was not on his side. I will now out myself as perhaps completely ignorant, but I feel I always understood Jerry’s unwillingness to merge with Microsoft. (In the interest of fairness and education, here’s GigaOm’s take on why Microsoft should now pursue the merger again.) Yes, perhaps it would have maximized shareholder value in that minute or for a few months following. But was that merger really the right thing for Yahoo! to do? Would combining Yahoo! with Microsoft create better company in the end? I never heard anyone say anything in that whole endless back and forth that led me to believe a better Yahoo! was necessarily going to be the end result. A merger for its own sake isn’t always the best answer.
To justify my thinking, I refer you back to what always seemed like an ill-conceived merger between AOL and Time Warner. Yes, at the time it maximized shareholder value, but then it really didn’t and everyone involved with that transaction is now gone. Just ask Ted Turner how he feels about it, having lost an alleged $7 billion in personal fortune due to that merger. $7 billion. Let that sink in for a minute.
In my view, companies should not be run on the basis of what maximizes shareholder value in the here and now, but on the basis of what will maximize the company’s value now and in the future. If that latter premise is taken care of, shareholder value will follow. Instead of letting day-traders who want to make quick money on the margins run our companies, we should be letting experienced people who are interested in building real and healthy businesses for our future run our companies. This seems like common sense to me. Doesn’t the state of Wall Street prove my point?